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Seth Walters

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  • Hollow Men, Hollow Markets, Hollow World [View article]
    Profound inefficiencies can endure for long in populations in the absence of competition. The nature of existence is that competition will always arise in time. When competition for our current political and economic systems arise, then the world will change in a meaningful way.
    Apr 2 06:42 PM | 4 Likes Like |Link to Comment
  • Tesla cuts deal to keep five N.Y. stores [View news story]
    Politicians understand that they are just like used car salesmen, and as such, they must stick together.
    Mar 30 12:24 PM | 1 Like Like |Link to Comment
  • King sells off following IPO [View news story]
    Candy Crush is not worth more than Star Wars, lol. This is an obvious short.
    Mar 26 02:24 PM | 2 Likes Like |Link to Comment
  • U.S. takes key step toward Atlantic drilling, sparking debate over sea life [View news story]
    This is good news, because I am a human and not a marine mammal, and cheap energy is good for humans. :)
    Mar 1 10:26 AM | 2 Likes Like |Link to Comment
  • Where Does Gold Go From Here? Let's Use 40 Years Of History As Our Guide [View article]
    Gold is a lot more likely to be $400 in June of 2017 than $4000. The price trends pretty well with time and tends to slowly oscillate around a constant value in inflation-adjusted dollars, and we are still definitely in "above fair value" territory. You're never going to beat inflation in the long term with gold, and you're never going to beat land.
    Feb 26 06:00 AM | 1 Like Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    I freely admit that I have no special insight into the future of the mass communications tech space. It is not my job and it is not what I do. It is Mark Zuckerberg's job, and he is a sharp fellow. I am quite sure he has thought this through and has an investment thesis. Rather than (as an absolute non expert in this field) questioning his decision to spend $19Bn on WhatsApp, it more makes me wonder why he is so willing to pay that much for it and what special insight he has on the future of mass communications that drives such a purchase when it does look sketchy from the perspective of more traditional investors.
    Feb 23 10:59 PM | Likes Like |Link to Comment
  • Facebook Buyout Of WhatsApp Offers Asymmetrical Risk To Reward [View article]
    You are right to view WhatsApp as a telecom competitor. They will absolutely eat some telco lunch, just like Netflix is eating the cable companies' lunch, and there is probably the ability to monetize that to some extent in time (although not to the extent of the cable companies). What is netflix, maybe 1/4 the price of cable? 1/5? It might be reasonable to view this whole communications market as 1/5 the size of the telcos. IF WhatsApp becomes a dominant and lasting player in the space (and they are at a disadvantage because they control none of the data infrastructure), they might perhaps in 10 years make something like 1/5 the current net income of Verizon, around 4Bn. At 30% net income (probably unrealistically high margin but w/e) that is about 13Bn revenue. If they had 1.5 Bn users that's $8 a year. Maybe some kind of tiered pricing plan. The question is, can the people at WhatsApp offer a service that the market will choose to pay about $0.75 a month for? (in 10 years). It is a risky bet. The telcos are undoubtedly aware of this sort of threat and they can try to use their war chests for political lobbying to impede this sort of thing, and they also happen to control a lot of the data infrastructure that would be used for this. Ultimately they do have the ability to simply lower their pricing plans and/or bundle superior text messaging services into their existing pricing plans. This is fundamentally a bet on the future of data infrastructure. A new technology that allowed transmission of a lot more bandwith for less cost, if developed by one of the newer tech companies like Google, would be a death knell for the telcos. If you expect this sort of disruption, AND you expect WhatsApp to succeed, this is a killer purchase.

    But, there is no guarantee that they will emerge as the dominant player in this space. There is no guarantee that a cheap bandwith infrastructure will arise that will be disruptive to cable and telcos by lowering the real cost of services and furthermore enabling more competition. But if those 2 things happen, WhatsApp was a great purchase for FB.
    Feb 23 09:58 PM | Likes Like |Link to Comment
  • When Good Models Go Bad [View article]
    As a modeler working in the sciences, I thoroughly enjoyed this piece, and was struck with how similar human behavior is across disciplines when it comes to ideas.
    Jan 31 03:09 AM | 5 Likes Like |Link to Comment
  • Samsung's Opening Shot In The Battle For The Soul Of Capitalism [View article]
    It's only a very small percentage of workers that work for companies that even issue shares. Furthermore, workers aren't going to be paid some grand surplus or increase their savings rate because they are being paid partly in shares - they are going to liquidate. If they don't liquidate their shares, then right off the bat you are going to axe aggregate consumption by whatever % isn't liquidated. That would mean a massive hit to revenues, GDP, and a collapse of the world economy. Paying part of compensation in stock would just make people take the time out of their day to convert their stock holdings to cash. The solution is exactly what Samsung is doing, to pay workers more. You can certainly argue that paying workers MORE in stock rather than in cash would be a nice way to align their interests with increasing productivity, but you can't cut global worker cash compensation and expect it not to send the economy into a tailspin.
    Jan 10 06:21 PM | Likes Like |Link to Comment
  • Pandora announces strong metrics, auto ad platform; shares +5.7% premarket [View news story]
    I and everyone I know uses Spotify.
    Jan 6 01:16 PM | 3 Likes Like |Link to Comment
  • My Quest To Make $1 Million In 10 Years [View article]
    Even if you ended up with 150k or 200k that would be pretty good. Good luck!
    Jan 6 11:13 AM | 5 Likes Like |Link to Comment
  • Warning Bells Are Sounding Ever Louder For Facebook's Long-Term Future [View article]
    Facebook makes money by selling advertising. Let's pretend you own a company and you are looking to buy some ad space. Whose eyeballs are you going to want to put your products in front of: 16-18 year olds (dirt poor) or middle aged people with a crapload of money to spend?

    Teenager use trends matter very little if you are selling ad space, unless you think they will continue their behavior as an adult when they have a disposable income. The chances of that happening are basically zero. Try using the services you are talking about (I use snapchat and fb for example) and then ask yourself if they are really going to have a meaningful impact in the demographic that is actually entrusted with spendable cash by our economic system. I would be shocked beyond belief if today's snapchatters are still using it in 10, 20, 30 years.
    Jan 1 05:57 AM | 15 Likes Like |Link to Comment
  • Dex Media: Time Is Running Out For The Yellow Submarine [View article]
    Well that's a heck of a specific prediction.
    Nov 28 10:10 AM | Likes Like |Link to Comment
  • The Pricing Power Tell [View article]
    The market is valuing AMZN at 177Bn now.... UPS only at 44Bn. Looks to me like AMZN could simply acquire UPS and not have to worry about any of this.
    Nov 27 05:17 PM | 3 Likes Like |Link to Comment
  • Sell-side indicator continues to flash "Buy" [View news story]
    Their indicator suggests that stocks should have been sold in 1998 and not bought again until 2009. I wonder if they did that.
    Nov 27 12:19 AM | Likes Like |Link to Comment
COMMENTS STATS
650 Comments
883 Likes